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Procedure
for disbursement of term loans under various schemes of the Corporation. The
Corporation has been extending term loans to fulfill various financial needs
of the loanees under different schemes as given below:- 1. Project Term Loan 2. Term Loan under EFS & ERS. 3. Term Loan under Medium Term Multipurpose Loan Scheme 4. Term Loan for Working Capital. 5. Term Loan under securitization of fixed assets. 6. Short Term Loan to existing Good Borrowers. Disbursement
under MTMPL Scheme, WCTL Scheme, Term Loan under securitization of fixed
assets and Short Term Loans to existing Good Borrowers are made immediately
on execution of legal documents, fulfillment of compliances of other terms
and conditions of Letter of Intent and deployment of entire promoters
contribution, if any. However
in the cases of term loans (under ERS/EFS) and project term loans normally
disbursement upto 20% of the sanctioned loan is considered on the basis of
C.A. Certificate after execution of legal documents, fulfillment of compliances
of other terms and conditions of Letter of Intent and deployment of entire
promoters contribution. Further,
considering the requirements of the project disbursement of more than 20% of
the sanctioned loan is also considered where retirement of import documents
through bank is involved. If
required, letter of comfort (LOC) is also issued in favour of the bank for
import of plant and machinery.
Normally first disbursement is made in 7-10 days after compliance of
legal and special terms and conditions of Letter of Intent. Second
and subsequent disbursements are considered after physical verification of
creation of fixed assets at site and verification of expenditure incurred
there against from the financial records, besides verification of financial records
for utilization of funds already disbursed by the Corporation as per the need
of the project and considering security margin aspect. If there are any changes in the approved
scheme the same are got approved from the Appraisal Cell. Second and subsequent
disbursement are made after physical verification of creation of fixed assets
at site and verification of utilization of funds already disbursed by the
Corporation. Checklist
for availing disbursements of term loans under various schemes of the
Corporation. 1. C.A.
certificate in the prescribed format. 2. Compliance
report of special conditions given in the Letter of Intent (LOI) along with
documentary proof, wherever required.
Photo copies of documents should be signed by the MD of the company/authorized
signatory. 3. Insurance
cover of the fixed assets in the joint names of the company and financial
institutions covering full value and all risks. 4. Item
wise details of expenditure incurred on plant and machinery/misc. fixed
assets. Photo copies of
Bills/receipts of advances from suppliers for major amount. 5. No lien account number, name of the
bank and branch. 6. Efforts in regard to tie up of working
capital requirement of the company. Details
of Processing Fee, Upfront Fee and Service Charges (w.e.f. 08.02.2006)
*
Service Tax and the Education Cess extra as applicable from time to
time. Good Borrower’s Scheme The
Corporation is having incentive scheme for Good Borrower Scheme w.e.f.
18.01.2007. The documented interest
rate in this scheme is 1.00% less than the prevailing lending rate excluding
real estate projects. The existing
Good Borrowers of the Corporation as well as of other Financial Institutions classified
as Standard Assets, as on close of the financial year are eligible. The
eligibility and other terms and conditions of the scheme are as follows:- i) The term loan under consideration shall
not be less than Rs.50.00 lacs. ii) The
net worth of applicant is not less than Rs.1.00 crore and turnover of the
company/concern is not less than Rs.1.00 crores as per last audited annual
accounts. iii) The
company/concern should have good financial position and track record of
consistent turnover and cash profits during preceding three years. iv) The
company should have satisfactory repayment record with the financial
institutions/banks, with whom the company has dealt in past three (3) years
and its account has been classified
as standard asset as on the close of the financial year. v) The
portion of plant & machinery and misc. fixed assets in the scheme shall
be secured additionally by collateral security. The value of such collateral security will be in the same ratio
in which the term loan is being considered for financing the project. OR The
promoter’s contribution in the proposed project should be minimum 30% of the
project cost. OR The
overall debt to equity ratio of the company/concern should not exceed 1.25:1. Revised
Interest Rates w.e.f. 18.01.2007
Schedule for disbursement in the case of Good
Borrowers (Classified under the Incentive Scheme for Good
Borrowers)
Disbursement
under Credit Scheme for Builders/Commercial Complexes/Residential Complexes Under
the credit scheme for builders/commercial complexes/residential complexes
disbursement from the Corporation for purchase of land or additional loan for
construction of commercial complexes/residential complexes on this land shall
be in the following manner:- i) The
borrower shall submit certificate of a Chartered Accountant in support of
expenditure incurred on the project and the sources of finance of the same. ii) The
borrower shall submit certificate from an architect approved/empanelled with
local authority that the construction has been carried out as per approved
building plans and have all safety measures as buy-laws of local
authority/fire department. iii) The
borrower shall submit valuation certificate for the construction work from an
approved valuer. iv) In
case the loan is for purchase of land, the same shall be directly remitted to
local authority on its explicit assurance of mortgage of land in favour of
RIICO. v) The
loan against land can be disbursed to the borrower in case the borrower has
already paid the cost to the seller of the land and the borrower makes
available title of the land for mortgage. vi) Where
the aggregate term loan assistance exceeds more than Rs.5.00 crores for the
entire project, the disbursement of additional loan towards implementation of
the project may be considered as follows:- |
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On
raising of 75% of total promoter’s contribution (in the ratio of share
capital and unsecured loans) and 50% of envisaged booking advance. |
Upto
65% of the total loan for the over all real estate project. |
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Balance
disbursement beyond this limit on deployment of 100% promoter’s contribution
and envisaged booking advances. |